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Growth model

Compound interest with the timing left in

Project a balance with separate compounding and contribution frequencies. The trace shows the converted contribution-period rate instead of hiding the timing convention.

Compound-interest modelNominal annual rate

Projected future value$50,969.84
Total contributed
$34,000.00
Modeled growth
$16,969.84
Contribution-period rate
0.5%

Show the math

  1. Equivalent contribution-period rate = (1 + 0.06 / 12)^(12 / 12) - 1 = 0.004999999999999893
  2. Contribution periods = 10 × 12 = 120
  3. Principal future value = 10000 × (1 + 0.004999999999999893)^120 = 18193.9673403229
  4. Contribution future value (end) = 32775.8693612923
  5. Total future value = 18193.9673403229 + 32775.8693612923 = 50969.836701615204

What the model assumes

The annual rate entered here is nominal and compounds at the selected frequency. The calculator converts that rate into an equivalent rate for each contribution period. Contributions are modeled at the selected beginning or end of each contribution period. Taxes, fees, changing returns and withdrawals are absent unless you model them separately.

The Investor.gov compound-interest calculator also separates starting amount, contributions, term, estimated rate and compounding choices. Use it as an independent comparison, not as proof of a future return.

Worked example

With a $10,000 starting balance, $200 contributed monthly at the end of each month, a 6% nominal annual rate compounded monthly and a 10-year term, the model produces $50,969.84. Of that amount, $34,000.00 is contributed capital and $16,969.84 is modeled growth.

Do not read this as a forecast. A constant rate is an assumption. Compare lower and higher rates on the scenario page and record why each rate is plausible for the decision.